Ana sayfa » Oil rises in Asian trade on expectations for US summer fuel demand ahead of OPEC+ meeting

Oil rises in Asian trade on expectations for US summer fuel demand ahead of OPEC+ meeting

Markets focused on the production policy decision to be taken by OPEC + at its meeting on June 2

by BUNKERIST

Oil prices rose in Asia on Tuesday, extending gains from the previous session, ahead of strong US summer fuel demand expectations and OPEC+’s production policy decision that will take at its June 2 meeting.

July Brent crude rose 6 cents to $83.16 a barrel by 06:08 GMT. More active August futures rose 5 cents to $82.93.

West Texas Intermediate (WTI) crude oil futures for July traded at $78.80 a barrel, up $1.08, or 1.39%, from Friday’s close, and there was no deal on Monday Memorial Day in the United States.

Oil prices rose more than 1% on Monday amid subdued trading amid public holidays in the UK and US, following a week in which US interest rates appeared to remain high for an extended period amid sticky inflation.

Some analysts said expectations of strong fuel demand as the summer driving and holiday season begins in the United States provided price support.

Despite the general view that higher interest rates could slow oil demand growth, data shows that oil demand growth is generally healthy.

On the air transportation front, the number of seats on U.S. domestic flights in May rose 5% month over month and almost 6% year over year to just over 90 million, surpassing 2019 levels.

The number of international flight seats for May rose 11% year-on-year to nearly 14.2 million, the data added, making levels 8% higher than the same period in 2019.

Meanwhile, all eyes will be on Sunday’s online meeting of OPEC+, where traders and analysts expect production cuts to continue and prices to rise further.

Oil prices are expected to move higher in the coming days due to the continuation of voluntary production cuts by oil producers and increasing expectations for the easing of US monetary policy. The start of the US driving season will also provide support.

Three sources from OPEC+ countries had said that voluntary production cuts of 2.2 million barrels per day were likely to be extended until the second half of the year.

Expectations of increased demand from China provided further support to prices after Beijing launched its third state-backed investment fund planned to revitalize the semiconductor industry.

Another positive factor for oil is the indirect external demand cycle from China as China announces more stimulus measures to support its domestic industry.